Tencent Capex Set to Rise Amid Stronger AI Commitment, Improved Chip Supply

Dow Jones07-13 18:07

Tencent's stronger AI investment commitment and improved chip supply lead Daiwa to raise its 2026 capital expenditure forecast for the internet company to 181 billion yuan from 108 billion yuan. Daiwa analysts caution that the higher expected capex could weigh on near- and medium-term earnings through higher depreciation. However, it should also enable faster cloud expansion and AI demand monetization from 2H, they say in a research note.

Tencent has made solid AI product deployment progress recently, but revenue from these productivity tools remains immaterial, with monetization still at an early stage and largely offset by rising training and inference costs, the analysts note. Daiwa lowers Tencent's target price to HK$670.00 from HK$700.00.

(END) Dow Jones Newswires

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment